ITEM:		PUBLIC HEARINGS
13.	CONSIDER APPLICATION TO AMEND GOODRICH LINE WATER DISTRIBUTION SYSTEM (POTRERO SUBDIVISION) AND APPLICATION FOR VARIANCE TO RULE 22; APPLICATION #20050413SLC; APN 239-102-001 and -003
Meeting Date:			November 21, 2005	Budgeted:	N/A
From:			David A. Berger,	Program/	N/A
			General Manager	Line Item No.: N/A
Prepared By:			Henrietta Stern	Cost Estimate:	N/A
General Counsel Approval: Yes.
Committee Recommendation: N/A
CEQA Compliance: SEIR certified by Monterey County in February 2005; MPWMD functions as a Responsible Agency.

SUMMARY: The Board will simultaneously consider whether or not to approve two applications by the Santa Lucia Community Services District (SLCSD), a public agency:

1. Application #20050413SLC (Exhibit 13-A) (revised November 2005) to amend the Goodrich Line Water Distribution System (GLWDS) that will serve the portion of the Potrero Subdivision that lies within the MPWMD boundary (14 out of 29 lots).

2. Application for a variance to MPWMD Rule 22-D-1-ii, which requires that a system capacity limit (production limit) be imposed as a required condition of approval for each WDS approved by the District. The variance request is provided as Exhibit 13-B.

For the variance request, the specific rule in question reads:

If the Board approves the permit, it shall establish an expansion capacity limit, the system capacity and municipal unit allocation for the water distribution system.

The “expansion capacity limit” refers to the number of connections that the system may serve, and is commonly called the “connection limit.” In this case, the total is 14, one for each single- family lot of the 29-unit subdivision that would be located within the District boundary. There is no disagreement that 14 connections should be set for the expansion capacity limit; this portion of the rule is not an issue for the variance.

The “system capacity” is commonly referred to as the “annual production limit” and is the focus of the variance request. As described in more detail in the “Discussion” section below, the GLWDS is notable in that the water-producing facilities (wells) and sources of water for the Potrero Subdivision lie outside of the District boundary. In essence, the applicant questions the requirement for MPWMD to impose a limit on water to be imported into the District to serve the 14 homes that lie within the District boundary. Other unique characteristics of the application are also described in the variance application (Exhibit 13-B).

The “municipal unit allocation” refers to quantities of water that would be deducted from a jurisdiction’s defined water allocation. The amount would be zero in this case, as the water in question is not derived from the California American Water (Cal-Am) system, which is currently the only system for which a water allocation program is in effect. Thus, the allocation issue is moot for this non-Cal-Am WDS, and will not be discussed further.

MPWMD Rule 90 states that the Board may grant a variance from the Rules & Regulations whenever it finds that: (a) special circumstances exist in a particular case; (b) practical difficulties or unnecessary hardship would result from the strict interpretation and enforcement of the rules; and (c) the granting of the variance would not defeat the purposes of the Rules & Regulations. These criteria are addressed in the variance application (Exhibit 13-B).

This application involves extensive documentation and correspondence, and is related to previous actions by other regulatory entities. All files associated with the application are available for review at the District office. Additional information is provided in the “Background” and “Discussion” sections below.

RECOMMENDATIONS: District staff recommends that the Board take the following actions:

1. Approve the Application for Variance shown in Exhibit 13-B as it refers to the system capacity limit for the imported water. The municipal unit allocation is inapplicable and should not be considered. The rationale for the recommended approval is provided in the “Discussion” section below.

2. Adopt the MPWMD Findings of Approval for Application #20050413SLC and Application for Variance to MPWMD Rule 22 shown as Exhibit 13-C with specific reference to Finding #19, District compliance with California Environmental Quality Act (CEQA) as a Responsible Agency. In adopting the Findings, the Board confirms that it has reviewed the Environmental Impact Report (EIR) on the Potrero Subdivision certified by the Monterey County Board of Supervisors in February 2005 (Notice of Determination dated February 16, 2005). The Draft and Final EIR were previously distributed to the Board under separate cover and is available at the District office for public review.

3. Approve Application #20050413SLC; authorize issuance of MPWMD Permit #M05-04 with the Conditions of Approval specified in Exhibits 13-D; and direct staff to file a Notice of Determination with the Monterey County Clerk. The Conditions of Approval include required conditions as specified in MPWMD Rule 22-D, with the exception of the system capacity (production) limit; also, special conditions related to reporting and access are included. The Conditions of Approval consider the comments of the applicant provided in a letter dated November 11, 2005 (received November 15, 2005 via e-mail from applicant’s attorney), which is shown as Exhibit 13-E. The “Discussion” section below addresses the applicant requests in more detail.

BACKGROUND: The following paragraphs provide background relevant to the application. Cited documents are available for review at the District office.

Original Application

Application #20050413SLC was originally submitted on April 13, 2005 for the GLWDS to serve 11 parcels at Wild Boar Run, Potrero area of Carmel Valley. The application was submitted as an amendment to the existing Santa Lucia Preserve (SLP) Water System. The affected parcels will be served by importing water via existing and extended distribution lines from an existing water system that is located primarily outside of the District boundaries. The means to serve the 11 parcels is referred to as the Goodrich Water Distribution Line in the application. The initial application materials included:

t Application for Water Distribution System Permit;

t Application Supplemental Questionnaire;

t Figure 1, from Denise Duffy and Associates showing the Goodrich Distribution Line, existing and proposed water lines, and proposed parcels within the MPWMD boundary;

t Notice of Determination for Potrero Subdivision, County of Monterey, County File Number PLN010001, dated February 16, 2005;

t County Health Department Water Supply Permit No. 270-2521, issued April 28, 2000;

t Fifteen paper copies of Draft (September 2003) and Final Supplemental Environmental Impact Report (EIR) for Potrero Area Subdivision, SCH No. 2002051095, dated April 2004, including responses to comments and technical appendices;

t Two copies of a CD-ROM containing Draft Supplemental EIR for Potrero Area Subdivision, and selected comment letters from local agencies.

The application was determined to be complete in an MPWMD letter dated May 18, 2005; however, information was requested to clarify the location, status and future plans for certain wells for which MPWMD has production records (Wells T-11A and T-17). Subsequent documentation provided by the applicant and research of GIS maps and well data by District staff through September 2005 clarified the accurate location of the District boundary in relation to the Subdivision; and confirmed that the two wells are within the District, were drilled and activated prior to Ordinance No. 96, and are considered to be pre-existing. The applicant clarified that these wells are not part of the Goodrich Line WDS as they are independent from the Goodrich Pipeline and are not planed to be used to serve the Potrero Subdivision. The wells will continue to serve the SLP gatehouse and minor irrigation and construction needs. The applicant’s agent has confirmed her understanding that that any substantive change to the existing situation with these two wells will require a permit from the District.

Changes to Project Description During Application Process

The District originally treated this application as creation of a new WDS because the GLWDS is a component of the SLP water system, which is not regulated as a permitted WDS within the MPWMD boundary. Subsequent discussion resulted in the determination that some aspects of the GLWDS are a “grandfathered” pre-existing WDS; thus, the application will be treated as an amendment to an existing system. There is no substantive difference between the permit processes for a new or amended system in this case.

Similar to the permits issued to the Canada Woods Water Company earlier in 2005, the GLWDS permit will identify pre-existing (“grandfathered”) wells that are not subject to regulation by Permit #M05-04 because they were completed prior to Ordinance No. 96, and no changes to current production practices are currently planned.

The original application indicated that 11 of the 29 Potrero Subdivision lots would lie within the District. This number increased to 14 lots when it was determined that the original application contained a figure that inaccurately located the District boundary. As noted above, wells T-11A and T-17 that were thought to be outside of the District are now accurately located within the District. An amended application containing these corrections was provided on November 4, 2005 (Exhibit 13-A).

Existing Goodrich Line WDS and Sources of Supply

The existing, County-approved SLP Water System operated by SLCSD has served the Santa Lucia Preserve area for the past seven years. The wells to supply the Goodrich Line WDS are located outside and south of the Carmel Valley Alluvial Aquifer and the water source is percolating groundwater, as confirmed by the MPWMD Water Resources Division Manager. The wells are located within the bedrock setting generally known as the Carmel Valley Upland formations. Up to 60 wells that will provide water to the Potrero subdivision are operated as part of a complex water system that serves the larger Santa Lucia Preserve development. The majority of these wells are located outside of the MPWMD boundaries.

The SLP Water System includes about 60 wells and 100 miles of pipeline throughout 20,000 acres, and nearly two million gallons of storage. The existing SLP Water System is permitted by the Monterey County Health Department (Permit No. 270-2521). The system is approved to serve a total of 350 residential lots, a golf course and associated community facilities at “buildout”. Presently, a total of 77 residential lots are served along with the golf course, and club facilities including dining, equestrian, fitness, swimming and lodging facilities. A large-scale (poster-sized) map of the existing SLP Water System with the GLWDS portion identified will be provided at the November 21, 2005 Board meeting. None of the properties are within the California American Water (Cal-Am) service area.

The property zoning in the Potrero Subdivision area is Monterey County LDR (Low Density Residential). Allowed uses per parcel include one single-family dwelling, and guesthouses, up to two animals and other minor uses. Additional units (senior or caretaker units) could be allowed per County zoning limitations.

Proposed System

The 14 Potrero Subdivision parcels within the MPWMD boundary will be served by importing water via existing and extended distribution lines from the SLCSD system via the Goodrich Water Distribution Line (Exhibit 13-A). Because all the wells that will supply water to the Goodrich Distribution Line are outside of District boundaries, the proposed system is considered to be importation of water. According to the application, no groundwater production will occur within District boundaries to serve the Potrero Area Subdivision via the Goodrich Line, including the 14 parcels within District boundaries.

Previous Regulatory Action by Monterey County

On February 15, 2005, the Monterey County Board of Supervisors approved the tentative map for the Potrero Subdivision comprised of 29 residential lots; a Notice of Determination was filed on February 16, 2005. The 29 parcels associated with each home site are in the process of being created via the subdivision of two existing legal parcels within the Santa Lucia Preserve (SLP), formerly known as Rancho San Carlos. Approval of the Subdivision was based on a Final EIR dated April 2004 and certified by the County on February 15, 2005. The EIR estimated that each home would use, on average, a total of 0.75 acre-feet per year (AFY).

During the original analysis of the SLP subdivision, and during the review of the more recent Potrero Area Subdivision, extensive technical analyses of groundwater and streamflow impacts were completed by specialist consultants for Monterey County, the lead agency. District staff reviewed and commented extensively on those analyses via the County subdivision and CEQA processes, and also met with the applicant, project consultants and County staff about hydrologic issues. As a result, extensive technical information regarding potential impacts and mitigation measures is available at the District offices, and was considered in the processing of this application. As described in the District’s August 24, 2004 letter to the Monterey Planning Commission on the approval of the Potrero Subdivision, District staff expressed satisfaction that a comprehensive integrated approach to hydrologic monitoring and assessment was being used, withdrew previous comments expressing concerns, and acknowledged that District recommendations are being followed.

MPWMD CEQA Compliance

The District Board action must comply with CEQA as well as MPWMD regulations. As a responsible agency, MPWMD will rely on the environmental documentation previously certified by Monterey County for the Potrero Area Subdivision. Monterey County environmental information as well as other pertinent information on file at the District office will be used to evaluate cumulative impacts on groundwater supplies and streamflow.

DISCUSSION: The staff recommendation is based on the following information:

Application for Variance

MPWMD Rule 90 states that the Board may grant a variance from the Rules & Regulations whenever it finds that: (a) special circumstances exist in a particular case; (b) practical difficulties or unnecessary hardship would result from the strict interpretation and enforcement of the rules; and (c) the granting of the variance would not defeat the purposes of the Rules & Regulations. These criteria were addressed in the variance request shown in Exhibit 13-B as follows:

Ø Special or Unique Circumstances: The variance request identified that (1) the applicant is a public entity; (2) the water system already exists; (3) none of the water is produced within the District or Cal-Am service areas; (4) the MPWMD permit is only for extension of a pipeline; (5) the extension would serve an already established and approved service area; and (6) the proposed expansion is minor in scope (roughly 5%) as compared to the total SLCSD service amount. The applicant provided Findings of Approval made by Monterey County regarding the physical capacity of the system to adequately meet demand, to remain within the safe yield of the basin and not harm other users, and to not harm off-site basins or aquifers with the EIR mitigation measures in place.

Ø Practical Difficulties or Hardship: Stated briefly, the applicant asserted that imposition of a production limit on the water imported to the portion of the subdivision within District boundaries would entail controlling the water use of 14 out of 29 homes in a subdivision (resulting in unequal treatment) and interfere with the integrated water system that currently exists. It would also not be consistent with the current requirements and conditions of approval imposed by Monterey County on the Potrero Subdivision and the water system serving it.

Ø Impact to MPWMD Rules & Regulations: The applicant noted that all other elements of Rule 22 would be followed, including annual reporting, conservation, indemnification, etc. The MPWMD production limit was designed to address potential effects to water resources within the District. Limiting importation into the District to serve a relatively small component of the overall water system would not further this purpose. It would treat one-half of a subdivision differently than the other half, but would not prevent more use of water elsewhere in the system, or lead to protection of environment.

Approval of Application

The Findings of Approval (Exhibit 13-C) are based on evidence provided in the application materials, including supporting documents on file at the District office. Staff believes the application meets the criteria and minimum standards set by District Rule 22. Pertinent information includes certified environmental documents, technical studies and reports, technical memoranda and maps, correspondence between MPWMD staff and the applicant, and previous approvals by other governmental entities. Based on the certified EIR for the Potrero Subdivision and supporting documents in the hearing record, MPWMD approval of the application is not anticipated to result in a significant adverse effect on the Carmel River or other water resource. The Findings also address the three criteria needed to approve the variance request.

The Conditions of Approval (Exhibit 13-D) proposed for Permit #M05-04 would be affected by the approval of the variance request – specifically, there would be no system capacity (production) limit on the amount of imported water to serve the 14 connections that would be designated as the expansion capacity limit. The Conditions of Approval do not include production or connection limits for wells that have been determined to be pre-existing (Wells T-11-A and T-17). However, these facilities have been inventoried and included in the permit to create a factual baseline of information for later use. Should these wells be changed in the future, an amendment to the District permit would be needed. These exemptions do not apply to annual well production reporting requirements (MPWMD Rule 56), which remain in effect.

The Conditions of Approval are consistent with MPWMD Rule 22-D governing approval of water distribution systems. An annual report on the total amount of water served to the 14 lots within the District and other data will be required in compliance with Rule 22-D-2. Special conditions are included to ensure that copies of monitoring reports required by Monterey County are forwarded to the District, that access for inspections is ensured, and that the District receives timely notice of pending or actual changes to the system.

As shown in Exhibit 13-E, the applicant reviewed draft Conditions of Approval and offered suggested changes. The recommended Conditions of Approval shown in Exhibit 13-D reflect some of these suggestions as noted below:

• Condition 1 – The applicant confirms that they will provide the 14 APN numbers of the new lots when they are available. No text change is needed.

• Condition 12 – Reference to a production limit has been removed as requested because of the assumed approval of the variance request. Possible changes to the connection limit (for example, if the number of lots served were increased in the future) or other factors listed in Rule 22-E should remain.

• Condition 18 – Clarification is requested by the applicant. This condition reflects delivery of water to the Goodrich pipeline within two years, not construction of each of the 14 homes within the service area; text was refined to reflect this intent. With this clarification, the applicant has no objection.

• Condition 19 – The applicant questions the applicability of Condition 19(b), reporting of the annual water use by the 14 homes within the District, because the variance results in no production limit being set on the imported water. As noted in the Condition 19 text, this information would be used only for record-keeping purposes and is not associated with a production limit. It is reasonable in the context of annual Water Distribution System and well production monitoring to tabulate the total amount of non-Cal-Am water use in the District and/or the total amount of water imported into or out of the District. Because the applicant will be metering water use and billing these properties anyway, it should not be a hardship to tabulate the total water use associated with the 14 parcels. Data on individual parcel water use is not required, only the 14-parcel total, so there are no privacy issues involved. Also, MPWMD Rule 22-D-2 (Mandatory Conditions of Approval) states that, “Every applicant, as a condition to holding a permit pursuant to this rule, shall report annually in the form and manner prescribed by the District (i) the quantity of water delivered from each source of supply, (ii) the total water produced …[continues].” Condition 19(b) is consistent with this Rule and the language has already been tempered due to the variance. For these reasons, staff does not concur with the applicant’s request to strike Condition 19(b) and did not change the text.

• Condition 22 -- Clarification of the intent of the condition is requested by the applicant and text refinement is suggested. The intent of the condition is to receive copies of future applicable annual monitoring reports submitted to Monterey County, and the text of Condition 22 has been amended to reflect this intent. Notably, as part of the CEQA review of the Potrero Subdivision, including technical coordination meetings with the applicant and Monterey County staff, District staff’s assistance and suggestions about hydrologic monitoring were received positively and were incorporated into the monitoring protocol. It is reasonable for the District to receive copies of hydrologic or related water production reports as the sources of supply are in the Carmel River watershed.

• Condition 25 – Clarification is requested by the applicant that the condition is applicable only to the GLWDS, not the entire SLP Water System. The condition was written with only the GLWDS in mind, and the text has been refined accordingly. This addresses the applicant’s concern. For reference, the District regularly receives notices from a variety of public agencies regarding various development and water proposals.

Noticing

Public notice has been provided no later than 10 days prior to this public hearing in several ways, including: (1) mailed notices to property owners within 300 feet of the affected Potrero Subdivision area; (2) posted notices within and along the perimeter of the GLWDS boundary; (3) posted notice at the District office; (4) notice of the public hearing to recipients of District agendas for the November 21, 2005 meeting; (5) notice of November 21, 2005 public hearings in The Herald; and (6) posting of the November 21, 2005 agenda and staff note materials on the District website.

EXHIBITS

13-A Application #20050413SLC to Amend Goodrich Line WDS (revised 11/4/05), including map of proposed system.

13-B Application for Variance to MPWMD Rule 22 signed October 27, 2005.

13-C Draft Findings of Approval of Application #20050413SLC (Permit #M05-04) and Application for Variance to Rule 22.

13-D Draft Conditions of Approval for Permit #M05-04, including:

Attachment 1: Service Area, and

Attachment 2: Indemnity Agreement.

13-E E-mail letter from applicant dated 11/11/05, received 11/15/05.

Provided to MPWMD Board under separate cover:

· Draft EIR for Potrero Subdivision dated September 2003.

· Final EIR for Potrero Subdivision dated April 2004.

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